In light of recent events with lower Overnight Policy Rates (OPR) and property developers being allowed to hand out property loans, into the Selangor market comes another major game changer - the 10% Bumiputera discount being opened to all races.
According to Selangor executive councillor Datuk Teng Chang Khim, he said that the 10% discount is being offered to all races of the low and middle-income bracket.
As quoted when contacted by Malaysiakini, Datuk Teng Chang Khim said, "We offer this to low and middle-income groups, so there is no reason for Bumiputera to be given discount and non-Bumiputera not to receive discount because they are equally poor.”
In a radical move, the 10% Bumiputera discount is also being removed from selected types of properties, namely Small office Home office (SoHo), Small office Versatile office (SoVo) and serviced apartments.
A SoHo unit is a space where you can either live or set up your office there, while a SoVo is a small office that comes with telecommunication and infrastructural facilities which allow for businesses to start up immediately upon moving in. For a clearer explanation on the different types of homes, explore the Categories of Homes in Malaysia.
These units come with commercial titles, and hence commercial utility rates as well. Buyers of these types of properties need to be prepared for higher water and electricity bills, along with higher assessment rates.
In line with the government’s affordable housing guidelines, there is also going to be a ceiling price set for these types of properties; with the ceiling price for serviced apartments set at RM270,000 and SoHo or SoVo at RM230,000.
The required household income to purchase these affordable units has also been increased to RM15,000 per month as opposed to the previous RM8,000 per month, although household income earners of below RM10,000 per month will still be prioritised.
Only if the lower income bracket group are unable to secure a loan, then and only then will the units be released to the higher income bracket. According to Datuk Teng, "The state government has spoken to developers in the state and taken in their feedback prior to drafting the guidelines. We believe the guidelines will pacify all parties involved, including the state government, developers, and house buyers.”
There were many voices who sounded out their concerns about the 10% discount being scrapped. The public is however ensured that the 30% Bumiputera ownership equity stipulated during the New Economic Policy (NEP) introduced in the 1970s to eradicate poverty still stands.
The NEP was introduced to ensure that the Malays get their fair opportunity, where they are entitled to special allowances and discounts for things like real estate and automobile.
One of the biggest change affected by the NEP was the restructuring of the economic ownership in the country. With an initial ratio of 2.4:33:63 for Bumiputera, other Malaysian and foreigner ownership respectively, it was changed to 30:40:30 under the NPE.
These new guidelines were set in place on 1st September 2016.